PM to target bankers' bonuses

Please note 'The Andrew Marr Show' must be credited if any part of this transcript is used.

ANDREW MARR:

Now, as promised, I'm joined here in Brighton by the Prime Minister. Good morning, Prime Minister.

GORDON BROWN:

Good morning.

ANDREW MARR:

Let's start, if we may, with the economy. Can you talk us through when and why you made your great u-turn on tax cuts and spending?

GORDON BROWN:

We brought in a fiscal reduction plan in the Budget. We'd been determined to maintain public spending over the period of the downturn, but we had at some point to make a decision about what we would do in the years to come. And what I've been determined to do is to balance off the need for a fair tax policy, stability, and protecting our frontline public services. And so what we will be doing over the next few years is maintaining our public investment as long as we are in recession and as long as there is there is the need to ensure the economy is strong, and then we will be concentrating by cutting inefficiencies, by cutting waste, by cutting costs where we can do so, by getting affordable public sector pay settlements, by sending out a message that we can sell off assets that we no longer need. We'll be concentrating on making sure that our frontline public services And that's really the political divide. We are determined to protect the frontline services, all the advances we've made in schools and in hospitals and in policing. Determined to protect them. I think you'll find that on the opposite side, there's a determination to have blanket public spending cuts, which would be bad for the economy and bad for the public services.

ANDREW MARR:

So you would accept that what you were saying back in June in the House of Commons about a straight choice between Labour investment and Tory cuts was wrong?

GORDON BROWN:

No, I don't accept that at all. What I accept is that we've had to make difficult decisions over the course of the last few years. Look, look, can I just

ANDREW MARR:

(over) Can I just stop you on that

GORDON BROWN:

Well just me

ANDREW MARR:

if I may because you talked about

GORDON BROWN:

(over) Well you may if you want.

ANDREW MARR:

You talked about the Conservatives. You warned the country the Conservatives would come in and make 10% cuts. The Treasury's own figures on spending between 2010 and 2014 add up to 9.3% cuts in real terms on real budgets. Not such a great difference from exactly what you were warning about the country

GORDON BROWN:

(over) Huge difference, huge difference. Let's be clear. The Conservatives will have cut 5 billion this year. They wouldn't have supported the programmes to take us out of recession. We would still be even more deeply in recession under the Conservatives. Unemployment would be higher. Deficits would be higher. Debt would be higher. Most small businesses would go under. As far as the future is concerned, what they're saying is they'd cut 30 billion next year, so you start from a proposition that the Conservatives are cutting now, they're cutting massively next year even before you're absolutely sure you're out of recession. Now there is no country in the world doing what the Conservative party are proposing because every country has been persuaded by our argument that you've got to make sure you get investment to get out of recession. And then what the difference is then, we protect the frontline services; they cut them. That's the simple answer to the question.

ANDREW MARR:

There can't be many countries in the world, Prime Minister, running debt at something like £6,000 a second.

Hold on, hold on. I think this has got to be corrected because you've put the point to me and I think it's important that people know the facts. When we entered this recession, we had lower debt than any of the major countries. Our financial prudence over the last 12 years had made it possible for us to reduce debt substantially. Now every

ANDREW MARR:

(over) You make that point very fairly. How does borrowing

GORDON BROWN:

(over) But hold on, you made the suggestion that somehow our debt was higher. Our debt has risen like every other country, but most countries will be in a position where they have roughly 80% of their national income in debt. Japan will be over 100%, Italy will be a lot higher as well. But all of us face exactly the same problem: there has been a one off hit to our financial revenues, particularly revenues from the financial sector as a result of this crisis, and we've got to deal with it over a long period of time.

ANDREW MARR:

But

GORDON BROWN:

But, if I may say so, to massively cut the deficit now would mean more job losses, it would mean more small businesses going under, it would mean more homeowners repossessed. And I think you know politics is

ANDREW MARR:

(over) But your own Treas If I may say so, your own Treasury figures

GORDON BROWN:

(over) Politics is about

ANDREW MARR:

(over) your own Treasury figures set out cuts, real cuts, starting only next year, 2010

GORDON BROWN:

(over) But hold on, hold on

ANDREW MARR:

(over) and then running deeply towards 2014.

GORDON BROWN:

Andrew, I don't want to have to go back and explain how the public finances work, but the fact is this.

ANDREW MARR:

Well I've got the figures.

GORDON BROWN:

You can bring out any figures you like, but no figures are definite because we're dealing with an economic crisis that we're coming through and having to make decisions all the time.

ANDREW MARR:

You're crossing your fingers, are you?

GORDON BROWN:

No, it's quite the opposite. If someone had said last year to me that the banks were going to collapse one by one, I wouldn't have been able to predict that. Nor you. We had done everything to keep inflation low in our economy, everything to deal with the problem of high inflation which had been the British problem for 50 years. But we now had to deal with a different problem and we've had to look every time at whether you make the right choice or the wrong choice. Now the difference between us, and between the political parties and us, is at every point during this downturn we have made the right choices. We made the right choices about Northern Rock, we made the right choice about restructuring the banking system. It's recognised throughout the world that Britain led the way in making the right choices about a fiscal expansion. We made the right choices about the need for international cooperation. On every one of these issues, the Conservatives when it came to the big call made the wrong choice.

ANDREW MARR:

How does British borrowing line up against other similar countries?

GORDON BROWN:

British borrowing is high this year because we have taken more action more quickly because we understood how deep the recession was. America will spend more next year on getting out of the recession. Britain has spent most this year. Now that

ANDREW MARR:

(over) And if we were well placed, if we were well placed, why is it

GORDON BROWN:

(over) Which is what we are.

ANDREW MARR:

that France and Germany are coming out of the recession ahead of us?

GORDON BROWN:

I think you'll see figures pretty soon that shows the action that Britain is taking yielding effect. And you can see it already in the unemployment figures because although unemployment's been rising, unemployment is between 7 and 8% in Britain, it's now passed 10% in most of the other countries. So we have managed to keep unemployment down. And I think you've got to look at another indicator: repossessions. Now repossessions have risen as a result of this crisis, but they're at a very low level compared with the 1990s. And the reason is that we put in a homeowner support scheme that meant that people could renegotiate their mortgages and those people who are unemployed had their mortgages protected. Now these are the tests of whether you can keep the economy moving forward even if you've got a very difficult recession.

ANDREW MARR:

You wouldn't say that unemployment's peaked yet, and the CBI talks about it peaking just under 3 million.

GORDON BROWN:

I would say that the rate of increase of unemployment has been slowing. I mean the facts are very clear. But we've had to deal with the summer school leavers, we've had to deal with graduates and college students leaving to try to get work, but every month about 300,000 people are going back into work. This is the most coordinated employment plan to deal with the recession that any government has done and I don't apologise for the fact that that has meant that we've had to raise the deficit to pay for it because I don't want to return to a situation of the 1980s when we had a generation of young people who were unemployed for years and we had a culture of unemployment that to some extent we're still having to deal with in 2009 - family after family, child after father, and then the next generation unemployed because there was a culture of unemployment created by that long recession and the long-term unemployment. We don't want cardboard cities, we don't want young people on the streets as a result of this. We want every young person to get back into work. And that's why we have spent money to do so. We're dealing with the recession in a completely different way from what happened in the 30s and the 80s.

ANDREW MARR:

You used not to talk about cuts and you now do talk about cuts.

GORDON BROWN:

(over) But

ANDREW MARR:

(over) Can I just finish? You say that the difference between you and the Conservatives is that they would cut deeply on frontline services

GORDON BROWN:

Now.

ANDREW MARR:

and you would find cuts elsewhere somehow. I put it to you that that is unlikely. No politician is going to go straight to the frontline services. All politicians, whatever their political background, are going to try and find less painful cuts. The question is where? And the Conservatives have started to lay this out, some of your ministers have, and I'd just like to ask you where you think the cuts are going to have to come?

GORDON BROWN:

Well, first of all, what is the difference? The Conservatives would be cutting now when people need help most. The Conservatives would be cutting 30 billion next year that we are not cutting. These are blanket cuts in public expenditure. What we are doing is over a period of time cutting back on inefficiencies - and Ed Balls already announced changes in the Education Department, I announced changes in the way we deal with civil service pensions, we've announced a huge asset sale programme that we're going to carry out in the next year or two, we've announced that we're going to make changes in the way that we deal with frontline services in health

ANDREW MARR:

(over) What about public sector pay agreements?

GORDON BROWN: so that we get better frontline service. Well we have public sector pay agreements. You know we got three year public sector pay agreements and I said to the TUC very bluntly that we will have to have realistic pay settlements. But realistic pay settlements is something that I think everybody who is in the public services will accept now because we have shown our willingness to make sure that we come through a recession by not doing what they did in the 1930s and what the Conservatives propose. We have shown that we are prepared to invest in the economy and I believe that the public sector workers will respond to my demand for realistic pay settlements.

ANDREW MARR:

And what about some of these crunchy big ticket items - things like Trident, things like the aircraft carriers?

GORDON BROWN:

Well you know I've already announced that we're prepared to reduce our Trident fleet and I want to be part of these multilateral negotiations.

ANDREW MARR:

And will we know the detail of this before the Election?

GORDON BROWN:

I've made proposals in these multilateral negotiations that there was a lot of colour about last week in New York and in Pittsburgh. You know one of the most important things to come out of it was every country round that table is now committed to a new Non-Proliferation Treaty. Those nuclear weapon states are all now, including Britain, committed to the reductions of their nuclear arsenals (where that can be done) or their nuclear fleet. And at the same time, we're asking non-nuclear states to accept an obligation that they have to prove - unlike Iran - they have to prove to the international community that they're not developing nuclear weapons, and in return we will give them civil nuclear power. We are on the verge of a very exciting breakthrough in non-proliferation agreements, and I believe that Britain is right at the centre of that. And that's why I put Trident and the discussion of that into the multilateral debate.

ANDREW MARR:

In terms of spending, to hit your target of halving debt you are going to have to slash spending. You can't just do it by trimming round the edges.

GORDON BROWN:

Hold on, our proposals

ANDREW MARR:

(over) Sorry, that's why people look at what the Conservatives are doing and they say well, they seem serious about this.

GORDON BROWN:

Yeah, but again, you know I've had to deal with this. I had a freeze of public spending in 1997/1998. I've never recoiled from the tough decisions and the hard decisions you've got to make. Politics is having the strength to take the tough decisions. Leadership is about taking the difficult decisions

ANDREW MARR:

(over) But also telling us about what you're going to do.

GORDON BROWN:

And I'm now telling you. We have a fiscal reduction plan. Some people will have to pay a higher rate of tax, above £150,000 a year. If you earn that, you'll pay a higher rate of tax. Some people will lose a lot of their reliefs that it's difficult to justify when other people are suffering if they're over £100,000 or £150,000 on their pensions. Some people will experience a rise in their national insurance of 0.5%. And at the same time, we will publish our figures of course in the Pre-Budget Report showing how we will protect the frontline service. Now that is, if I may say so, very different from a Conservative party that wants cuts now, cuts that are deeper, cuts to pay for inheritance tax, cuts for the very wealthiest millionaires in our country, and cuts that would be blanket cuts in public service.

ANDREW MARR:

You mentioned tax just now and people on £150,000 plus. There aren't very many of them, and it has been suggested that actually that should come down to £100,000, that is also fair. There wasn't a huge public uproar when you announced the 50p tax. Do you think it's possible for it to go down?

GORDON BROWN:

Do you know what I think Andrew's happened in Britain? You know over the last year, the great British values, people's belief in fairness, fair play and acting responsibly have come through. It's because people believe in acting fairly and acting responsibly that they're so appalled by the banking system. And let me just say one thing about

ANDREW MARR:

(over) Just before you do, can I just stop you on that because what you say suggests that taking that rate down to £100,000 is the kind of thing that people's innate sense of value and fair play would tolerate?

GORDON BROWN:

(over) No, I'm not I'm not proposing that and we've made announcements in the Budget. But what I do say is this. People in Britain have a very strong sense of fairness and a very strong sense that people should take responsibility for their actions. You know I've come back from Pittsburgh and I've been talking to the other leaders about bonuses and remuneration in the banking system. You know I'm saying today enough is enough. We are not going to stand by and allow people to return to a situation where bad old days, so I

ANDREW MARR:

(over) And can you actually stop that

GORDON BROWN:

(over) Well I want to say to you today just as we will have a fiscal responsibility to deal with the public finances, we will come back and we will have a new Business and Financial Services Act as well. That will ban the old bonus systems and make it impossible for firms to be able to use them.

ANDREW MARR:

How will this work?

GORDON BROWN:

I'll just tell you in a minute. It will also say that where there is bad behaviour, the Financial Services Authority will have the right to intervene. And where companies are not prepared to act in a way that is consistent with all these new proposals about the fair treatment of bonuses and remuneration, there will be penalties imposed on these companies. So I

ANDREW MARR:

(over) Is this a crunchy measure that's going to come in before a General Election or an aspiration?

GORDON BROWN:

This is a measure that we will bring to the House of Commons in the next few weeks as part of the Queen's speech, and we will be saying to people that we are not going to allow in any way a return to these terrible old days when people justified big bonuses and we found out that they were based on speculation, on short-term deals, they were based on no long-term performance gains for the company and people of course were out of the company before they'd actually seen the damage that had been done. So the bonus

ANDREW MARR:

(over) And can a government get its fingers into the market sufficiently to actually do that kind of thing?

GORDON BROWN:

We're now going to do it. I've become utterly convinced as I've talked to my fellow colleagues at Pittsburgh just how far we all have to go because they're all reporting to me that the banks are just anxious to return to the bad old days. Some of them are ready to announce big bonuses that are completely unacceptable.

ANDREW MARR:

You think they haven't got it?

GORDON BROWN:

I think a lot of people have not understood the damage that banks have done by their actions, and not understood that the mood of the British people and other countries is that you've got to act fairly and you've got to act responsibly. What I do and what a small businessman and a self-employed person and a worker does in their everyday life, you know you've got to play by the rules, you know you've got to act fairly to your colleagues, you know you've got to work hard for everything you've got. I think the banking system forgot that and I am determined that we clean up this system once and for all. And you'll see me setting out proposals in my conference speech not just about the banking system, about the whole future of our economy and the whole future of our society. My fight is for the future of Britain. My fight is for an economy that delivers jobs that are sustained. My fight is for a society where in an insecure world people are far clearer about the responsibilities they owe to people as well as clear about the rights they have.

ANDREW MARR:

Your fight is also, if I may say so, about your own future though.

GORDON BROWN:

And the fight for the future is not actually just about me. It's not just about the Labour party. It's actually about the future of this country.

ANDREW MARR:

Sure, sure.

GORDON BROWN:

You know leadership, if I may say, and you're really coming to that - leadership is fighting for what

ANDREW MARR:

You guessed.

GORDON BROWN:

Well leadership is fighting for what you believe in. It's the strength to take the tough decisions through difficult times, the strength I believe that I've been able to show over the last year on the big decisions. And it means being sure about what you believe - which I am; be sure also that you have the strength to get up in the morning and take the job on and move it forward, and the strength to carry through everything that you say you're going to do.

ANDREW MARR:

And yet, Prime Minister, it's not working. I mean that's a brutal truth, but it is the truth. If you look at the polls and you look at the way you are seen, it's not working.

GORDON BROWN:

Do you know what's happened over the last year, and I think we've got all got to reflect on it. What has happened is that people have seen a recession and seen the impact, the fear that they've had, the panic that was in the banking system, and they're wondering if we've got it sorted out. They're wondering if we've done the right things. They cannot be absolutely sure until they see the results that we're out of recession. And people have also seen a political scandal over the last year and we've got to be honest about this. I myself am shocked by the things that I saw in MPs expenses. And people are saying well if MPs are abusing the system and we are having to suffer, then the whole of politics, the whole of politics is really in disrepute. And we've got to rebuild faith in politics. And I therefore accept that there's a suspended judgement and the suspended judgement is one that I think, as people see us coming out of the recessions, dealing with the banking problem I've just talked about, rebuilding the economy, dealing with the political scandal and cleaning up the political system, they'll see that if you're thinking about the future, you know it's going to be a progressive future. You can't go back to the Tory stuff about free markets deciding everything.

ANDREW MARR:

(over) And yet you come

GORDON BROWN:

You can't go back to just cutting public expenditure when you want to do it irrespective of the effect on the economy.

ANDREW MARR:

(over) you come back to these polls, you come back to these polls again and again. You see them. You see what people say. You see what people say in your own party, you see what senior members of your own

GORDON BROWN:

But Andrew

ANDREW MARR:

you see what your own Chancellor has said.

GORDON BROWN:

(over) But Andrew, Andrew, you

ANDREW MARR:

(over) I'm sorry, but you must recognise, you must get up in the morning sometimes and look yourself in the mirror and think am I really the man for this job?

GORDON BROWN:

It's very funny because you've got to stand back in politics. You've got to reflect on what's happening. And of course you say look some people think someone else could do the job better, you've got to consider

ANDREW MARR:

(over) Do you ever have qualms, ever have doubts?

GORDON BROWN:

(over) You've got to consider that. But, no, I don't have doubts because I've started doing something very difficult. I've started trying in the interest of British jobs and British people and the security of British families to make the world economy work for people. And I've led the way round the world, spent night after day persuading my colleagues around the world of the action that is necessary and we are now coming out of recession as a result of the actions that we've taken. So I have no doubt that what I'm doing is the right thing to take us through this, but I also know I've got to prove that we are fighting for the future as well as fighting to get out of recession.

ANDREW MARR:

But a lot of people would say, looking at this party, it has lost the fight, it's "lost the will to live" in the words of your own Chancellor.

GORDON BROWN:

Not at all. This party has had to fight for everything it's got. I have had to fight in my life for everything I've got. I've had to fight through all kinds of difficulties that I have faced and I know what happens. A setback can either be a challenge that means that it's an opportunity to do something better or you roll over. I do not roll over. The setback for me is the challenge, the opportunity to learn of course (if you make mistakes) and to do things better.

ANDREW MARR:

(over) Are there any circumstances

GORDON BROWN:

(over) And that's what it's all about for me.

ANDREW MARR:

Are there any circumstances in which you would stand aside before an election because you know as things stand at the moment, your party isn't going to be defeated; it's going to be slaughtered?

GORDON BROWN:

But, Andrew, if you stand back from this, this is an age where only progressive governments can make the decisions that matter. I mean that's what we're finding around the world. What I've got to do over the next few months is show that the actions

ANDREW MARR:

(over) So why is the Labour party more unpopular in the last national election, the European Elections, than at any time since 1910?

GORDON BROWN:

But I just explained it to you. We've had a year when we've had an economic crisis and we've had a political funding crisis, a political scandal.

ANDREW MARR:

(over) And as the face, as the pinnacle of that party, you take no responsibility for that at all?

GORDON BROWN:

(over) Of course, of course. I'm coming here to tell you I take all responsibility, I take full responsibility. Leadership is about the strength to take the tough decisions. But sometimes when you take the tough decisions, it takes time for people to see the benefit and I will continue to take the necessary tough and long-term decisions for Britain. Now it's easy for an opposition party because you're judged by slogans and you're judged by sort of presentational things and you're judged by soundbites. A government has to make the right calls, you've got to make the right judgements, and I believe that people will find that over the last year I've made the right calls with my Chancellor Alistair Darling on the big issues affecting our economy.

ANDREW MARR:

You must have sat there - you mentioned it earlier on - at the United Nations and watched Colonel Gaddafi delivering a deranged tirade so bad that even his own translator had to give up and say I can't take anymore of this. And you must have thought that discussion with him about al-Megrahi was a terribly bad decision. At least you can say that was a mistake.

GORDON BROWN:

Well, first of all, I didn't sit through Colonel Gaddafi's speech. I was not there. Secondly, I made it clear to Colonel Gaddafi when I met him, before the Scottish Executive had made the decision, that this was not our decision to make. But I also made it clear subsequently that we would not try to change that decision, we had no power to do so. I believe that the first thoughts should be with the Lockerbie relatives and I believe that everything we have done over these last few years have been to secure compensation, to secure support for these families. But we have got to acknowledge also that as part of negotiations 10 years ago, we have persuaded Libya not to be a nuclear power state, persuaded Libya to renounce international terrorism; and whatever happened at the United Nations this week, we are determined to make sure that Libya does not have a nuclear weapon and does not involve

ANDREW MARR:

(over) And it was worth it

GORDON BROWN:

(over) and does not involve itself in international terrorism again. But there was no deal. So if you're suggesting there was any deal, there was no deal. There was no conspiracy, there was no attempt to make anything conditional on anything else.

ANDREW MARR:

(over) Well let me ask a very straight question that you haven't answered yet. As a Scottish MP perhaps, not as Prime Minister, what do you personally think about the decision to release Mr al-Megrahi?

GORDON BROWN:

I think it was the response of the Libyans that was the worst thing about him. I think from my point of view, if the decision was being made by the Scottish Executive - and they're right to do so - we would not interfere and stop that decision because we

ANDREW MARR:

(over) So you'd go through the whole thing again?

GORDON BROWN:

We would not interfere and stop that decision. But equally we've got to make it absolutely clear, as I did to Libya, that Megrahi is still guilty, he has never had his sentence quashed. People believe that the Libyans were responsible for this and their renunciation of international terrorism and of nuclear weapons is an important element of building a better future.

ANDREW MARR:

A lot of people would be amazed to hear you say in effect I would do it all again.

GORDON BROWN:

As far as these decisions

ANDREW MARR:

Yes.

GORDON BROWN:

these decisions were not in our hands, as you know.

ANDREW MARR:

No pressure at all on the Scottish government?

GORDON BROWN:

We couldn't pressure the Scottish government. It was a quasi-judicial decision. I think, Andrew, you've really got to look at the facts of this situation. They had the power to make the decision. If we had tried to interfere in it, it would have been a mistake. Equally, at the same time, we made it clear to the

ANDREW MARR:

(over) You're the head of the British government. This has changed the way Britain is seen around the world, particularly in America, and you're the head of the British government.

GORDON BROWN:

But, Andrew, Andrew, you're the person that's written most about devolution. You're the person that's written about how power is devolved and legislative power is devolved. We devolved that power to make the decision

ANDREW MARR:

Couldn't you have made your own view clear?

GORDON BROWN:

I'm sorry, Andrew, we devolved the power to make the decision. Once that decision was in the power of the Scottish Executive, we could not make that decision. But I've made it absolutely clear of my horror at the terrorism that was conducted on that day in Lockerbie. I will never forget that day. I've also made it clear that the reception that the Libyans gave to Megrahi was completely unacceptable and we've made our protestations known. I believe that they did then listen and they didn't bring Megrahi, as they wanted to do, to the Independence Day celebrations. But nothing can undo the terrible tragedy of Lockerbie and I feel even at this time, as we discuss it, that the people who are most affected by this are the relatives of those who died on that terrible day.

ANDREW MARR:

If you were an American president, we would know all about your medical history. You were asked in the States about your eyesight, and I think the reason you were asked is because people were wondering whether that would be a reason for standing down at some point. Let me ask you about something else which everybody has been talking about out there in the Westminster village, which a lot of people in this country use prescription painkillers and pills to help them get through. Are you one of those people?

GORDON BROWN:

No. I think this is the sort of questioning that is

ANDREW MARR:

It's a fair question, I think.

GORDON BROWN:

is all too often entering the lexicon of British politics. I have had very serious problems with my eye. I lost my eyesight playing rugby. I had three major operations and they could not save my sight. I then had exactly the same thing happen to my second eye. I had the same retinal detachment, I had the same fear therefore that I would lose the sight in that eye, and I had to get a very big operation to deal with that. And every year of course I have to check, as I did only a few days ago, that my eyesight is good and there has been absolutely no deterioration in my eyesight and I think people should be absolutely clear that although

ANDREW MARR:

(over) What about my other question?

GORDON BROWN:

I answered your other question. Although I have problems with my eyes and it has been very difficult over the years, I think people understand that you can do a job and you can work hard. And I think it would be a terrible, terrible indictment of our political system if you thought that because someone had this medical issue, they couldn't do the job. So, Andrew, I think these questions, these questions - of course you might be right to ask them, but I think when people ask questions about these things, particularly about my eyesight, I feel that I have done everything to show people that I can do the job even with the handicap that I've had as a result of a rugby injury.

ANDREW MARR:

We've talked about the polls and this conference is sort of seething with people saying something dramatic needs to happen. You've made it clear that that dramatic thing is not going to be Gordon Brown standing up and saying I'm stepping aside for somebody else. So can I ask you about how you intend to deal with the next few months as a campaigning politician and, in particular, whether you are now able to say that you would or would not participate in a television debate or maybe several television debates with the other party leaders?

GORDON BROWN:

Well that's an issue for the future when we come nearer

ANDREW MARR:

(over) Well is it? The others can talk about it.

GORDON BROWN:

... when we come nearer an election. What I'm going to do in the next few months is actually go round the country and go to every region and talk to the people of this country and answer their questions directly and talk to them about the issues that are before us. And I think one of the problems is we get too much involved in this Whitehall game. I mean this programme this morning is, even though it's in Brighton, is about sort of Whitehall inside politics as you've just revealed by your questions. I mean I think we've got to get out there, talk to the people, answer their questions. Look we've got to

ANDREW MARR:

(over) Sorry, can I just say You say it's Whitehall. Out there, we're in the South East of England. At the European Elections, your party managed to achieve 8% in this party in the UK and came behind the Green Party and UKIP.

GORDON BROWN:

And we'll be fighting for the future by showing people that while you can have a protest vote election and a referendum on the government - and that happens as you know in mid-term elections all the time - that when it comes to the big choice, the big choice, we have got the right policies for the future. I just have to say to you very clearly, we announced a major initiative on cancer yesterday, which I'll be talking about on Tuesday. We've announced major changes in the way we deal with schooling, so that everybody has a good school. Neighbourhood policing has been introduced in this country and is now about to be expanded over these last few years, in the last few years itself. Now when we talk and go round the country, I talk to people about how they can get access to the health service and the damage the Tories would do, how they can get better schooling and the cuts in education the Tories would bring, how we can get neighbourhood policing better so it's more accountable to the people, and the cuts that would happen after the Conservatives came into that frontline service. And I talk to people about social care. We've got a huge programme to help elderly people who are worried, some of them sick to death about having to be in institutional care without the money to pay for it, and we have put forward proposals that have an answer to that problem. Now that's what I find people talking about round the country, not about my eyesight or anything else, and that I think is the big issue that people want addressed for the election. We need a new economy to meet the new challenges. We need a society where there's such insecurity because of a fast changing world where people accept they have new responsibilities to make our society work, and I'll be talking about that on Tuesday, and we need a politics that is far more accountable directly to the people in so many different ways.

ANDREW MARR:

You talk about politics. Good idea to cut the number of MPs to 500?

GORDON BROWN:

I don't think that's the beginning of fundamental reform of our political system. I think the beginning of fundamental reform of our political system is making sure that MPs and of course any institution like the banks, like the financial institutions, are properly accountable to the values of the British people. And I think the lesson that we've learned - and I've been learning lessons all the time on this - during the last year is if you don't make your institutions properly accountable to the public interest and to the values of the British people - and that's from financial institutions to parliament - then sometimes they do not work in the public interest. And we've got to make sure that there's a direct line of accountability that is far stronger to all the big institutions of society, so that people feel they have more control over the decisions they make.

ANDREW MARR:

Another Whitehall story if you like, but more in the papers today about Baroness Scotland. Is her position secure?

GORDON BROWN:

I've had to look at this very carefully. You know it is a serious issue when someone who is an illegal worker ends up working for anybody. And I've looked at this. Baroness Scotland acted in good faith at all times. She did not hire someone she knew to be an illegal worker. She checked the documentation and so she would dispute what the person is saying. But I think the most important thing is the Borders Control Agency looked at this issue and they said that

ANDREW MARR:

(over) And there's nothing today that makes you change your mind on this?

GORDON BROWN:

Well there's not because Baroness Scotland said and the Borders Control Agency said that she took all the steps necessary to check the documentation. Her mistake was not to keep copies, and for that she was rightly fined and has profusely apologised. And it's right to apologise because it's a serious matter.

ANDREW MARR:

Prime Minister, you've talked about what you've got right at some length today, all the things you've got right over the last year. Over the last year, what's been your biggest mistake?

GORDON BROWN:

I think (sighs) my biggest mistake is not to move faster and further in applying these values of fairness and responsibility to all our institutions. I'm telling you today what we'll do about banks. It's the toughest action of any country in the world, but it follows my meeting at G20. I'll be telling people on Tuesday what we'll do to make reforms stick in other areas where I think we could be faster and further. If you look at the last 12 years, you know you've got to ask yourself is the question of the last two years that we have had too much fairness? And the answer when we look at bank bonuses - no, we could be a fairer society. Is the lesson of the last 12 years that we could be less we need to be less responsible or more responsible

ANDREW MARR:

(over) So you didn't in a way stick with your own values earlier on when it came to bankers and bonuses.

GORDON BROWN:

And do you know what the lesson I've learned is? The only way you can make sure that institutions apply these principles of fairness and responsibility is that they're properly accountable. And the only way you can make them properly accountable is by tough rules and tough laws.

ANDREW MARR:

So you think, you would accept that maybe during that big, long boom when the city was roaring ahead, as a Labour politician you weren't paying quite enough attention?

GORDON BROWN:

Well that's my point. All of us did not recognise that the world had gone so global that every bank was entangled with another and it was impossible to see the picture domestically of one institution without looking at everything that was happening round the world. So we're not going to allow that to happen again.

ANDREW MARR:

Right, okay.

GORDON BROWN:

If I may say so, I was criticised over the last 12 years for having too much regulation. The lesson is we should have had more and I accept that now.

ANDREW MARR:

Alright. Prime Minister, thank you very much indeed for joining us this morning.